UPDATE 2-Refining margins shrink at oil producers Cenovus, Husky

* Cenovus third-quarter operating profit down 28 pct

* Husky third-quarter net profit down 3 pct

* Cenovus shares up 0.52 percent; Husky shares gain 0.2 pct

Oct 24 The narrowing price difference between
crude oil and the petroleum products extracted from it hit
refining margins at Canadian oil producers Cenovus Energy Inc
and Husky Energy Inc, which both reported
earnings on Thursday.

Margins fell as pipeline capacity increased in the southern
United States, easing bottlenecks, and the price gap between the
world's two most actively traded crude oil contracts leveled out
in July.

The price gap between U.S. benchmark West Texas Intermediate
(WTI) and European benchmark Brent crude
collapsed in July for the first time since 2010 and stayed
between $2 and $6 per barrel for the next couple of months.

The slump in refining cash flow pushed Cenovus' overall cash
flow down 17 percent to C$932 million, or C$1.23 per share, from
C$1.1 billion, or C$1,47 per share in the year-ago period.

Oil sand production rose in the quarter, driven by a 63
percent increase in volumes at the Christina Lake project in
northern Alberta, which offset a 22 percent fall in quarterly
production at Foster Creek, also in northern Alberta.

Cenovus, which operates oil sand, conventional oil and
natural gas projects in Canada, and holds a 50 percent stake in
two refineries in the United States, also said it is on track to
boost net oil output to 500,000 barrels per day by 2023.

Shares of the energy giant were up 0.52 percent at C$30.85
on Thursday morning on the Toronto Stock Exchange.

HUSKY MEETS ESTIMATES

Rival Husky Energy, Canada's No.3 integrated oil producer,
reported a 3 percent fall in quarterly profit. Adjusted to
remove most one-time items, profit rose 6 percent to C$544
million, or 55 Canadian cents per share, in line with analysts
average forecast, according to Thomson Reuters I/B/E/S.

Husky's shares were up 0.21 percent at C$29.26 on Thursday
morning on the Toronto Stock Exchange.

The company, controlled by Hong Kong billionaire Li
Ka-shing, said net income fell to C$512 million, or 52 Canadian
cents per share, in the third quarter ended Sept. 30 from C$526
million, or 53 Canadian cents per share, a year earlier.

Husky Energy, which operates in Canada and Asia, said cash
flow rose 6 percent to C$1.35 billion in the quarter. Total
upstream production increased 8 percent to 309,000 barrels of
oil equivalent per day.

Reuters is the news and media division of Thomson Reuters. Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Learn more about Thomson Reuters products: